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Mike Butler

Amalgamation tactics underhand

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Voter apathy appears to be the not-so-secret weapon that the Local Government Commission seems to rely on in local government amalgamations proposed for Hawke’s Bay, Northland, and Wellington. If no one objects a transition to amalgamation is self-starting.

That strategy appears to be coming unstuck in Hawke’s Bay with four of the five councils in the area in turmoil over the issue, and the Hastings District Council, whose mayor is promoting amalgamation, deeply divided.

Amalgamation is a central government initiative, with similar proposals in Northland and Wellington at the same time as the Hawke’s Bay push.

Legislation was changed in 2012 removing the possibility of Napier, Carterton, Kaipara, or other communities of interest, voting down amalgamation. Should residents demand a vote, any majority vote must be region-wide.

Another innovation that appeared with the 2012 amendment was that any “demonstrable support” for amalgamation in any region could trigger a proposal.

Unsurprisingly, pro-amalgamation groups started to appear including A Better HB, the Better Wellington group, and a similar group in Northland.

They pose as grassroots movements clamouring for salvation by amalgamation but they are small groups of wealthy individuals often with close ties to the Local Government Commission.

It is possible that these people are positioning themselves for lucrative roles in council controlled organisations to which responsibility for the regions’ resources are likely to be devolved.

Upon request, the Local Government Commission would write up a proposal very much along the lines sketched out by the various “better” groups and invite submissions both written and oral.

Those proposals were pretty much the same with a mayor of a unitary authority covering a large area, councillors, community boards that transmogrified into local boards that included appointees with elected members, and a Maori board appointed by unspecified groups or individuals.

Submissions were heard in Hawke’s Bay last June that showed 83 percent opposition – although a number of opposing submissions from Napier were essentially the same submission signed with different names.

The commission published a “position paper” last November that brought some modifications creating the current proposal for a Hawke’s Bay Council that would absorb the councils of Hastings, Napier, Wairoa, and Central Hawke’s Bay, plus the Hawke’s Bay Regional Council, with five local boards, and a Maori board, with the headquarters in Napier.

The commission advised that 2,000 residents would be phoned to survey opinions on the proposal. That survey started this week. Widespread hostility could end the amalgamation process.

As already mentioned, the Local Government Commission works closely with the “Better . . . ” groups by sending press releases early and planning media initiatives. When it came time for the opinion survey in Hawke’s Bay, the Local Government commission unleashed a media blitz.

A big issue in Hawke’s Bay was how an amalgamated council would handle Hastings public debt of $55.7-million and internal debt of a further $32.1-million.

In a vaguely worded statement, commission chair Basil Morrison proposed ring-fencing that would mean loans raised by the current councils would be repaid by their current ratepayers, through a targeted rate in those areas. Ring-fencing would be from the start date of an amalgamated council, should it proceed on November 1, 2016, for five years to 2021.

The commission also released a report on council infrastructure prepared by MWH, a global engineering consultancy, which essentially said that although Hastings had high debt the city had been good and done all required roading and piping work required, and the lack of such work in Napier, Wairoa, and Central Hawke’s Bay meant that those areas had to spend more to catch up.

A commission flyer promoting amalgamation and telling recipients to keep it handy should they receive a call from Colmar Brunton was delivered in every letterbox through out the region.

The HB Today carried the report in its lead story today, A Better HB had a full-page advert on the same issue, and a key Better HB activist had a pro-amalgamation letter published.

But the commission’s elegant solution to the political problem of Hastings’ debt and the apparent orchestrated PR campaign backfired.

The Napier City Council bitterly complained to the Local Government Commission that the MWH report on infrastructure was $1-billion out and demanded that the commission put the amalgamation process on hold.

Hastings councillor Wayne Bradshaw in a letter to the editor of the Hawke’s Bay Today newspaper, interpreted the commission’s vague ring-fencing statement to mean that payment of Hastings combined internal and external debt of $87.8-million over five years would mean a 25 percent rates hike of around $550 a year for every Hastings ratepayer.

Articles, letters and texts criticising amalgamation filled the Hawke’s Bay Today while Colmar Brunton staff were on the phone asking Hawke’s Bay residents what they thought of it all.

Presumably, should the Local Government Commission phone find overwhelming opposition, a final proposal would not be released and that would be the end of the matter for the time being. But should the commission choose to proceed, the next step would be to release a final proposal.

If a final proposal is released, residents will have 60 days to petition for a poll. A petition would require 10 percent of the total number of voters in a district. Eight hundred signatures in Wairoa would trigger a regional vote in Hawke’s Bay.

Any close look at amalgamation proposals shows they don’t stack up. Proponents struggle to identify a need and resort to meaningless assertions like “a stronger voice” or “a better place to live”.

Claimed savings are minimal – the $10-million-a-year saving quoted for Hawke’s Bay represents just 3.7 percent of the total annual expenditure of the current five councils in the area.

Those savings are supposed to come from job cuts but the Auckland amalgamation showed that both the number of council employees and the total council wage bill increased.

Similarly the likelihood of huge cost blowouts on information technology, such as the $100-million IT cost overrun in Auckland, is either ignored or understated.

After years of silence, Auckland councillor and former head of the Auckland Regional Council Mike Lee has gone on record over the Auckland amalgamation, a proposal he initially supported.

“What we didn’t reckon on was the intensive back-door lobbying by vested interests and the emergence of a multiplicity of government appointed council-controlled organisations dominated by appointees of the new National-led government and devolving of key regional responsibilities to these bodies”, he wrote.

“Nor did we envisage the influence of the un-elected Independent Maori Statutory Board, with two votes on every committee, the result of a coalition deal between National, Act, and the Maori Party”. (1)

The likely impact of Maori boards may be predicted based on the antics of the Auckland Maori Statutory Board and its $295-million wish list that included compulsory teaching of Maori in all Auckland schools, a naming protocol in Maori, financial literacy programmes to promote Maori engagement in trade delegations, foreign direct investment, and so on.

Council-controlled organisations have had a much more pervasive impact and Auckland has seven of them: Auckland Council Investments Ltd, Auckland Council Property Ltd, Auckland Tourism, Events and Economic Development Ltd, Auckland Transport, Auckland Waterfront Development Agency Ltd, Regional Facilities Auckland, and Watercare Services Limited.

The unlimited supply of fresh water is something everyone in this water-filled country has taken for granted – until now. Watercare is the Auckland council-controlled organisation that bills residents for water use.

The handling of water rates in Auckland, with the introduction of user-pays in all suburbs in 2012, meant user charges were largely put on top of existing rates. That meant that some areas that had a nominal rates increase of 3.6 percent in that year actually had a 12 percent increase when including water charges.

The purpose of the Local Government Commission, according to its website, is to promote good local government, and good local government as defined in law must enable democratic local decision-making by and on behalf of communities.

Proposals for amalgamations in Northland, Hawke’s Bay, and Wellington-Wairarapa appear to reduce local decision-making, reduce elected representation, increase the number of appointees, and put the control of regional resources in the hands of central government appointees.

This is not promoting good local government.

Mike Butler is the founder of Hastings Against Amalgamation.

1. Auckland super city failures should act as a warning to all, HB Today, March 7, 2015.